GLOBAL MARKETS-Shares hit 1-month high; dollar, yen firm

                                
 * Global stocks hit one-month high on corporate results
                                
 * Markets await results from Citigroup, General Electric
                                
 * Dollar, yen firm against major currencies
                                
 
                                
 By Atul Prakash
                                
 LONDON, July 17 (Reuters) - World stocks hit a one-month
high on Friday on growing optimism that the earnings season may
turn out to be better than expected, while investors set their
eyes on giants such as Citigroup <C.N> for clearer market trend.
                                
 European shares recorded a fifth straight day of gains, with
the FTSEurofirst 300 <.FTEU3> index of top European shares
rising 0.5 percent. Britain's FTSE100 <.FTSE>, Germany's DAX
<.GDAXI> and France's CAC-40 <.FCHI> climbed between 0.5 percent
and 0.9 percent.
                                
 Reassuring quarterly earnings from JPMorgan <JPM.N>, Goldman
Sachs <GS.N> and Intel <INTC.O> have boosted hopes about an
economic recovery, although there were signs of some caution on
bond and currency markets ahead of results from Bank of America
<BAC.N>, General Electric <GE.N> and Citi.
                                
 MSCI global equities index <.MIWD00000PUS>, which has gained
6.5 percent so far this week on corporate earnings results, was
up 0.2 percent after touching its highest level since June 15.
Emerging stocks <.MSCIEF> also hit a one-month peak.
                                
 "The markets have been given a much needed shot in the arm
by the encouraging set of numbers coming out from the banking
sector," said Owen Ireland, analyst at ODL Securities in London.
                                
 "Whilst confidence levels can often be about perception, the
reality is that we have seen a consistent set of results from
some of the worlds' largest institutions."
                                
 Banks were among top gainers, with HSBC <HSBA.L>, Barclays
<BARC.L>, Lloyds <LLOY.L>, BNP Paribas <BNPP.PA> and Societe
Generale <SOGN.PA> gaining from 0.1 percent to 1.5 percent.
                                
 U.S. stocks rallied for a fourth day on Thursday after
strong results from major U.S. bank JPMorgan. Japan's Nikkei
<.N225> closed up 0.6 percent on Friday, but gains were capped
by political uncertainty ahead of an election next month.
                                
 Some analysts said that it was too early to be overly
optimistic about the global economy as data was still ringing
warning bells and some companies face a liquidity crunch.
                                
 A survey showed on Thursday that factory activity in the
U.S. Mid-Atlantic region contracted for a 10th consecutive month
in July, posting a worse than expected decline. [ID:nN16411053]
                                
 CIT Group Inc <CIT.N> was in discussions on Thursday with
potential lenders to secure financing, after the collapse of
rescue talks with the government left the 101-year-old U.S.
lender to hundreds of thousands of small and medium-sized
businesses on the brink of bankruptcy. [ID:nN16442670]
                                
 "The market is looking for good news and it is interpreting
everything as good news. Whether it is interpreting it
correctly, I am not too sure," said Justin Urquhart Stewart,
director at Seven Investment Management.
                                
 
                                
 DOLLAR FIRM, OILS SLIP
                                
 The dollar and yen were firmer against other major
currencies, reflecting caution about corporate earnings. The
euro was down 0.4 percent at $1.4090 <EUR=> and down 0.5 percent
at 131.95 yen <EURJPY=>. 
                                
 Euro zone government bond futures pushed higher, catching a
bid after bomb blasts ripped through hotels in Indonesia and as
investors fretted about the possible bankruptcy of CIT Group.
                                
 Strategists, however, see the bond market losing some
 momentum as European equities rose.
                                
 "Obviously we had a bounce back yesterday on the back of
data and CIT news and that flowed through today given events in
Indonesia," said Sean Maloney, interest rate strategist at
Nomura in London. 
                                
 "We have seen a little bit of safety bid but not sure
there's going to be a lot to push it higher ... We have a lot of
earnings coming out from the U.S. today and that's going to be
the main focus," he said.
                                
 The Bund future <FGBLc1> was 28 ticks up at 121.76 compared
with 121.48 at Thursday's settlement close. In the cash market,
10-year Bunds yielded 3.331 percent <EU10YT=RR>, up slightly 
from levels in late Thursday trade.
                                
 Oil <CLc1> fell 0.6 percent to trade below $62 barrel, but
was on course to rise about 2.8 percent this week.
                                
 Spot gold <XAU=> was steady after dropping in the previous
session, but key base metals traded lower.
 (Additional reporting by Emelia Sithole-Matarise, Dominic Lau
and Tamawa Desai; editing by Patrick Graham)
                                
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